Bhajan Lal vs Presiding Officer Labour Court Ambala And Ors

CWP No. 4006 of 2017 -1 -
IN THE HIGH COURT OF PUNJAB & HARYANA AT
CHANDIGARH
(221-2) CWP No. 4006 of 2017
Date of Decision: 02.11.2026
Bhajan Lal .....Petitioner
Versus
Presiding Officer, Labour Court, Ambala and Others .....Respondents
CORAM: HON'BLE MS. JUSTICE KIRTI SINGH
Present: Mr. Rakesh Nagpal, Advocate for the petitioner.
Mr. Kapil Bansal, DAG, Haryana.
Mr. Shantanu Bansal, Advocate
for respondent No.4.

KIRTI SINGH , J. (ORAL)
1. The present writ petition has been filed under Articles 226 and
227 of the Constitution of India, seeking quashing of the Award dated
18.08.2016 (Annexure P-6) passed by the learned Labour Court, Ambala,
whereby the reference raised by the petitioner-workman was answered
against him.
2. Briefly stated, as per the pleaded case, the petitioner is that he
was initially appointed as a Peon on 23.04.2008 and was subsequently
engaged as a Generator Operator on daily-wage basis at ESI Hospital,
Jagadhri, where he continued to work till 16.07.2013. According to him, his
services were verbally terminated on the said date without issuance of any
notice or payment of retrenchment compensation, in violation of Section 25-
F of the Industrial Disputes Act, 1947 (for short, 'the Act'). He further
alleged that the management had retained junior workers and engaged fresh
workers in his place, in violation of Sections 25-G and 25-H of the Act. He
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CWP No. 4006 of 2017 -2 -
claimed that provident fund and ESI contributions were deducted from his
wages and that wages for the period from 01.07.2013 to 16.07.2013
remained unpaid. On these premises, he sought reinstatement with
continuity of service and full back wages.
3. Respondent No.2, Harish Kumar, denied having employed the
petitioner or having terminated his services. Respondent No.3, ESI Hospital,
Jagadhri, maintained that the operation and maintenance of the generator set
installed at the Hospital had been entrusted to different contractors from time
to time and that the petitioner was engaged through such contractors.
Respondent No.4, National Building Construction Corporation, also denied
any employer-employee relationship with the petitioner, asserting that it had
not directly employed him for the work in question.
4. On the basis of the pleadings of the parties, the learned Labour
Court framed issues, inter alia, as to whether the petitioner was an employee
of the management of ESI Hospital, Jagadhri, or of the contractor; whether,
in case he was found to be an employee of the Hospital, termination of his
services was illegal and, if so, to what relief he was entitled; and whether
there existed any employer-employee relationship between the petitioner and
respondents No.2 and 3. The parties led their respective evidence. The
petitioner appeared as WW-1, whereas the management examined Shailesh
Kumar Singh, Executive (HRM), as RW-1 and Dr. Nature Bakshi, Senior
Medical Officer, ESI Hospital, Jagadhri, as RW-2.
5. Vide the impugned Award dated 18.08.2016, the learned Labour
Court held that the petitioner had been engaged through different contractors
entrusted with the operation and maintenance of the generator set installed at
the Hospital. It noticed that the service provider had changed from time to
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CWP No. 4006 of 2017 -3 -
time and that the contract for the period from 01.07.2012 to 30.06.2013 had
been awarded to M/s Deepak Electricals, whereas Harish Kumar was
entrusted with the work from 16.07.2013 onwards. The learned Labour
Court further observed that the petitioner himself admitted that he had not
been issued any appointment letter by the Hospital and that his services had
been discontinued by Harish Kumar-respondent No.2 upon commencement
of the latter's contract. It also found that there was no evidence to establish
that wages had been paid directly to the petitioner by ESI Hospital, Jagadhri.
Accordingly, it held that the employer-employee relationship between the
petitioner and the Hospital had not been established and answered the
reference against him.
6. Learned counsel for the petitioner contends that the learned
Labour Court has failed to appreciate the evidence in its correct perspective.
It is submitted that the attendance register, diesel record, salary record,
payment-of-wages record and generator logbook, produced before the
learned Labour Court, establish that the petitioner had been working at ESI
Hospital, Jagadhri. It is further contended that the petitioner had worked for
several years and his services were discontinued on 16.07.2013 without
compliance with the mandatory provisions of Section 25-F of the Act.
Learned counsel also draws attention to the admission made by RW-2 that,
after the petitioner's discontinuance, Harish Kumar engaged three other
workers, namely, Ajit Singh, Goldy and Sonu, who continued to work on the
generator set. According to learned counsel, the aforesaid admission
establishes that the work had continued and the petitioner had merely been
replaced by fresh workers. It is, therefore, argued that the action of the
management was also in violation of Sections 25-G and 25-H of the Act.
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7. Learned counsel further submits that the management has failed
to produce any registration certificate under Section 7 of the Contract
Labour (Regulation and Abolition) Act, 1970, and that the contractors did
not possess licences under Section 12 thereof. In this regard, reliance is
placed upon the cross-examination of RW-2, wherein he admitted the
absence of the requisite registration and licences. It is also contended that
provident fund and ESI contributions were deducted from the petitioner's
wages and that the management cannot avoid its statutory obligations merely
by describing the petitioner as an employee of successive contractors.
Reliance has also been placed upon the letter dated 21.10.2010 issued by the
Labour Commissioner, Haryana, as well as the judgments in Hargurpratap
Singh v. State of Punjab, 2007 (13) SCC 292 and Akram v. State of
Haryana, CWP-14739-2013.
Per contra
8. , learned State counsel submits that the operation and
maintenance of the generator set installed at ESI Hospital, Jagadhri, was
entrusted to different contractors from time to time and the petitioner was
engaged through such contractors. It is contended that the petitioner was
neither appointed nor paid wages by the Hospital and that the change of
contractor was accompanied by deployment of the incoming contractor's
own workforce. It is further submitted that the petitioner has failed to
establish that the contractual arrangements were sham or that the Hospital
was, in fact, exercising the authority of an employer over him. Learned
counsel, therefore, submits that the findings recorded by the learned Labour
Court are based upon the evidence on record and warrant no interference.
9. Learned counsel for respondent No.4 also opposes the petition
and submits that the impugned Award has been passed after proper
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CWP No. 4006 of 2017 -5 -
appreciation of the evidence and does not suffer from any illegality.
10. I have heard learned counsel for the parties and perused the
relevant material on record.
11. A perusal of the material on record reveals that the controversy
essentially revolves around the nature of the petitioner's engagement. The
petitioner asserts that he was initially appointed as a Peon and subsequently
as a Generator Operator by ESI Hospital, Jagadhri. The management, on the
other hand, maintains that the generator operation and maintenance work
was outsourced to successive contractors and that the petitioner was engaged
through them. The question is whether, having regard to the arrangement
under which he performed those duties, he was an employee of the Hospital
or was engaged through the contractors entrusted with the work. The
determination of this question is material because the petitioner seeks to
fasten liability upon the Hospital for discontinuance of his services and
invokes the protections available under the Act on that basis.
12. It is well settled that the mere fact that a workman performs
duties within the premises of an establishment, or that his work is necessary
for its functioning, does not by itself establish an employer-employee
relationship with that establishment. At the same time, the description of a
person as a contract worker or the existence of an agreement with a
contractor cannot be treated as conclusive. The Court has to examine the
substance of the arrangement and determine who, in reality, exercised the
authority of an employer over the workman.
13. In this regard, the law laid down by the Hon'ble Supreme Court
in Steel Authority of India Ltd. v. National Union Waterfront Workers,
(2001) 7 SCC 1 , is instructive. The Hon'ble Supreme Court has held that
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CWP No. 4006 of 2017 -6 -
where a genuine contract-labour arrangement exists, the mere engagement of
contract labour does not automatically create an employer-employee
relationship between the principal employer and the workers engaged
through the contractor. However, where the contract is found to be sham,
nominal or a mere camouflage, the industrial adjudicator is competent to lift
the veil and determine the real relationship between the parties. The inquiry,
therefore, has to be directed towards the genuineness of the contractual
arrangement and the actual relationship governing the engagement of the
workman.
14. Examining the present case in the light of the aforesaid
principle, the evidence reveals that the operation and maintenance of the
generator set installed at ESI Hospital, Jagadhri, was entrusted to different
contractors from time to time. RW-2, Dr. Nature Bakshi, proved the service
agreement executed between ESI Hospital, Jagadhri, and M/s Deepak
Electricals for the period from 01.07.2012 to 30.06.2013 as Ex.M-1. He also
proved the subsequent agreement executed with Harish Kumar as Ex.M-2.
The petitioner himself, in his deposition, acknowledged that he had not been
issued any appointment or engagement letter by the Hospital. More
importantly, he admitted in his cross-examination that his services had been
discontinued by contractor Harish Kumar on the very day the latter entered
into the contract for operation and maintenance of the generator set.
15. The aforesaid admission assumes significance when considered
alongside the petitioner's own affidavit where he referred to his engagement
through different contractors from time to time and stated that Harish Kumar
had taken charge of the work on 16.07.2013. He also acknowledged that,
prior thereto, he had been working through other contractors. Thus, the
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CWP No. 4006 of 2017 -7 -
petitioner's own evidence does not disclose a direct appointment by the
Hospital; rather, it describes successive engagements through service
providers entrusted with the work. The assertion of an initial appointment as
Peon and subsequent appointment as Generator Operator by the Hospital has
not been found proved by the Labour Court on the evidence led. The fact
that the petitioner performed duties at the same premises does not, without
further material, establish a direct employment relationship.
16. The petitioner has relied upon the fact that he performed
generator operation duties at ESI Hospital, Jagadhri, and asserted that the
management's records and deductions towards provident fund and ESI
corroborated his employment. However, the evidentiary value of such
circumstances must be assessed in the context of the contractual
arrangement under which the work was being performed. The Award does
not record a finding that the Hospital itself appointed or remunerated the
petitioner in its capacity as an employer.
17. The maintenance of attendance and operational records by the
Hospital is not, by itself, inconsistent with the existence of a genuine
contract-labour arrangement. The principal employer may maintain or verify
such records to ensure that the contractor is providing the contracted service
and that the generator remains operational. The material question is whether
these records establish that the Hospital itself had appointed the petitioner,
paid his wages as an employer, regulated his service conditions or exercised
the ultimate authority to discontinue his employment. In the absence of such
supporting evidence, the performance of work at the Hospital cannot be
treated as conclusive proof of direct employment. The learned Labour Court,
therefore, cannot be said to have committed an error merely by declining to
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CWP No. 4006 of 2017 -8 -
infer a direct employment relationship from the existence of these records.
18. The absence of a registration certificate with the Hospital and
the absence of licences with the contractors under the Contract Labour
(Regulation and Abolition) Act, 1970, have also been specifically urged by
the petitioner. RW-2, during his cross-examination, admitted that ESI
Hospital, Jagadhri, did not possess a registration certificate under the said
enactment and that the contractors, including M/s Deepak Electricals and
Harish Kumar, did not possess licences under the Act. This admission is a
relevant circumstance and cannot be ignored. Sections 7 and 12 of the
aforesaid enactment impose statutory obligations upon the principal
employer and the contractor respectively. Their non-compliance may attract
consequences contemplated under that legislation. However, the absence of
registration or a licence does not, by itself, result in automatic absorption of
contract labour or establish a direct employer-employee relationship with the
principal employer.
19. The distinction is important. The question whether the statutory
requirements under the Contract Labour (Regulation and Abolition) Act,
1970, have been complied with is distinct from the question whether the
contractual arrangement was genuine or merely a device to conceal direct
employment. The latter question has to be determined on the basis of
evidence concerning the actual relationship between the parties. In the
present case, the petitioner has not been able to demonstrate, on the basis of
the material noticed in the Award, that the successive contractual
arrangements were sham or that the contractors were merely names
interposed by the Hospital to disguise its own employment relationship with
him.
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CWP No. 4006 of 2017 -9 -
20. The contention regarding deduction of provident fund and ESI
contributions also does not lead to a different conclusion. Such deductions
are relevant circumstances while examining the nature of an engagement,
but their evidentiary value depends upon the identity of the person or entity
responsible for making the deductions and remitting the contributions. In a
genuine contract-labour arrangement, statutory contributions may also be
made in respect of workers engaged by the contractor. The mere fact that
provident fund and ESI deductions were made from the petitioner's wages,
therefore, cannot, in isolation, establish that the Hospital was his employer.
In the absence of material establishing that the Hospital itself appointed or
remunerated the petitioner in its capacity as an employer, this circumstance
does not displace the evidence regarding his engagement through
contractors.
21. The next contention relates to the engagement of Ajit Singh,
Goldy and Sonu after the petitioner's discontinuance. In this regard, the
cross-examination of RW-2 assumes particular significance. He categorically
admitted that, after 16.07.2013, Harish Kumar had deployed his own persons
for running the generator set and that, by removing the petitioner, Harish
Kumar had engaged three workers, namely, Ajit Singh, Goldy and Sonu,
who were continuing to work. He further admitted that the generator was
required to operate round the clock in three shifts and that Deepak
Electricals had earlier engaged three workers, including the petitioner, for
performing the work in different shifts.
22. The aforesaid admission establishes that the work of operating
the generator continued and that the incoming contractor deployed three
other workers after the petitioner ceased to work. However, the mere
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continuity of the work or deployment of a fresh workforce by the incoming
contractor cannot, by itself, establish that the Hospital had retrenched the
petitioner. The distinction between discontinuance of the services of a
contractor's worker upon a change of contractor and retrenchment by the
principal employer cannot be lost sight of. The material on record indicates
that the contractual arrangement with the outgoing contractor had come to an
end and the incoming contractor deployed his own workforce. The
petitioner's own evidence also attributes the discontinuance of his services to
Harish Kumar. No material has been demonstrated to establish that the
Hospital itself had issued any order of termination or exercised the authority
to discontinue the petitioner's engagement.
23. Equally, the admission of RW-2 regarding the engagement of
the three workers cannot be considered in isolation from the petitioner's own
case concerning the successive contractors. The petitioner has not
established that he had been appointed by Harish Kumar for the period
preceding 16.07.2013 or that the said contractor had employed him for the
requisite period so as to attract the protection of Section 25-F against him.
The material on record instead indicates that the petitioner had been engaged
through the outgoing contractor and that the incoming contractor deployed a
separate workforce upon obtaining the contract. The fact that the same work
continued and was performed by three other workers is not, without further
proof, sufficient to establish a violation of Section 25-F by the Hospital.
24. The allegations under Sections 25-G and 25-H of the Act also
have to be examined in the context of the employer-workman relationship
and the respective statutory requirements. These provisions cannot be treated
as automatically attracted merely because the workman ceases to perform
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CWP No. 4006 of 2017 -11 -
the same work and other persons are thereafter engaged. The petitioner was
required to establish the relevant circumstances governing his
discontinuance, the identity of the employer responsible for the action and
the applicability of the statutory provisions to that employer. In the present
case, he has not established that ESI Hospital, Jagadhri, was his employer or
that the engagement of Sonu, Ajit and Goldy was an act of retrenchment or
subsequent recruitment by the Hospital.
25. The petitioner has also relied upon the letter dated 21.10.2010
issued by the Labour Commissioner, Haryana, contending that where the
work of the same nature is again allotted to a contractor, a workman whose
services have been discontinued is required to be given priority in re-
employment. The said letter has been noticed. However, the petitioner has
not established the factual foundation necessary to demonstrate that the
direction was attracted to the precise contractual arrangement in question or
that the Hospital had acted contrary to an enforceable obligation arising
therefrom. The letter cannot, in the absence of proof of the requisite
circumstances, be treated as establishing a direct employer-employee
relationship between the petitioner and the Hospital. Nor can it, by itself,
displace the findings recorded by the learned Labour Court on the basis of
the evidence concerning the successive contractors.
26. The reliance placed upon Hargurpratap Singh v. State of
Punjab, (2007) 13 SCC 292 , is also required to be considered. The principle
that an ad hoc employee should not ordinarily be replaced by another ad hoc
employee is well recognised. However, the application of that principle
depends upon the nature of the original engagement and the identity of the
employer. In the present case, the petitioner has not established that he was
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directly appointed by the Hospital on an ad hoc basis. Rather, the evidence
noticed by the Labour Court indicates that he had been engaged through
contractors entrusted with the operation and maintenance of the generator
set. The subsequent deployment of workers by an incoming contractor,
therefore, cannot, merely by invoking the principle laid down in the
aforesaid judgment, be treated as replacement of a direct ad hoc employee
by the Hospital. The said judgment does not assist the petitioner in
establishing the foundational employer-employee relationship asserted by
him.
27. Once the petitioner has failed to establish the employer-
employee relationship with ESI Hospital, Jagadhri, the allegation that the
Hospital illegally terminated his services in violation of Section 25-F of the
Act cannot be accepted. Likewise, the allegations under Sections 25-G and
25-H cannot be fastened upon the Hospital merely on the basis of the
subsequent deployment of other workers by the incoming contractor. It is
clarified that the aforesaid conclusion is confined to the claim of direct
employment and the alleged statutory violations against the Hospital on the
material placed before the learned Labour Court. The question whether the
outgoing or incoming contractor incurred any independent liability under the
Act would require examination of the particular employment relationship
and the evidence relevant thereto. The mere failure to establish direct
employment with the Hospital cannot, by itself, be treated as a declaration
that no statutory obligation could arise against a contractor.
28. The scope of interference by this Court in exercise of
jurisdiction under Articles 226 and 227 of the Constitution of India is also
well settled. This Court does not sit as an appellate court over the findings
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recorded by the Labour Court and would not ordinarily substitute its own
appreciation of evidence merely because another view may be possible.
Interference is warranted where the findings are perverse, based on no
evidence, suffer from patent illegality or disclose an error of jurisdiction. In
the present case, the learned Labour Court has considered the contractual
arrangements, the evidence of RW-2 and the admissions made by the
petitioner himself. The documentary records relied upon by the petitioner
have to be appreciated in the context of the contractual arrangement and do
not, by themselves, establish direct employment by the Hospital. The
admissions regarding the subsequent deployment of workers and the absence
of registration and licences have also been considered in the foregoing
discussion. The petitioner has, therefore, failed to demonstrate that the
conclusion drawn by the learned Labour Court is one which no reasonable
adjudicator could have reached on the material available on record.
29. For the reasons recorded hereinabove, the questions arising
from the issues framed by the learned Labour Court stand answered against
the petitioner insofar as his claim of direct employment with ESI Hospital,
Jagadhri, and the consequential relief sought against the Hospital are
concerned. The petitioner has failed to establish that the Hospital was his
employer or that it had retrenched his services in violation of the provisions
of the Act. The material regarding the subsequent engagement of other
workers and the non-compliance with the registration and licensing
requirements under the Contract Labour (Regulation and Abolition) Act,
1970, does not, in the facts of the present case, establish the direct employer-
employee relationship asserted by him. No perversity, patent illegality or
jurisdictional error in the impugned Award has, therefore, been made out
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CWP No. 4006 of 2017 -14 -
warranting interference by this Court.
30. In view of the foregoing discussion, this Court finds no merit in
the present writ petition.
31. Consequently, the present writ petition is dismissed.
32. Pending miscellaneous application(s), if any, also stand
disposed of.
(KIRTI SINGH)
JUDGE
02.11.2026
Ritika
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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